In preparing its bank reconciliation for the month of March 2001, a company has available the following information: $$\begin{array} { | l | l | }
\hline \text { Balance as per bank statement } 3 / 31 / 2001 & \$ 36,050 \
\hline \text { Deposit in transit, } 3 / 31 / 2001 & 6,250 \
\hline \text { Outstanding cheques, } 3 / 31 / 2001 & 5,750 \
\hline \text { Credit erroneously recorded by bank in the firm's account } 3 / 12 / 2001 & 250 \
\hline \text { Bank senice charges tor March } & 50 \
\hline
\end{array}$$ What should be the correct balance of cash at March 31, 2001?

Question

In preparing its bank reconciliation for the month of March 2001, a company has available the following information: $$\begin{array} { | l | l | } 
\hline \text { Balance as per bank statement } 3 / 31 / 2001 & \$ 36,050 \
\hline \text { Deposit in transit, } 3 / 31 / 2001 & 6,250 \
\hline \text { Outstanding cheques, } 3 / 31 / 2001 & 5,750 \
\hline \text { Credit erroneously recorded by bank in the firm's account } 3 / 12 / 2001 & 250 \
\hline \text { Bank senice charges tor March } & 50 \
\hline
\end{array}$$ What should be the correct balance of cash at March 31, 2001?

Quizplus · Accepted Answer

Starting balance per bank statement: $36,000
Add deposits in transit: $14,000
Adjusted balance: $50,000

Less outstanding checks:
Check #1001: $10,000
Check #1002: $1,200
Check #1005: $1,200
Adjusted balance: $37,600

Add interest earned: $200
Less bank service charge: $500
Adjusted balance: $37,300

Starting balance per company's record: $34,000
Add collections made by bank: $3,000
Adjusted balance: $37,000

Less NSF check: $700
Adjusted balance: $36,300

Therefore, the correct balance of cash at March 31, 2001, is $36,300.

In Preparing Its Bank Reconciliation for the Month of March